Spending

Gas station rewards cards aren't the best for getting gas discounts, experts say: Try this instead

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Key Points
  • Gasoline prices spiked 38% from last year and consumers are looking for ways to save at the pump.
  • Gas station rewards cards often offer minimal discounts compared to general-purposes credit cards or warehouse club rewards cards, experts say.
  • "It's much better to get a general-purpose credit card that can be used more widely and offers a strong percentage, such as 5%, of cash back on gas," one expert says.

Gasoline prices spiked 38% from last year, according to data from the Bureau of Labor Statistics. The average price for a gallon of gas is $4.24, according to AAA. Last year at this time it was $2.88.

Understandably, consumers are looking for ways to save at the pump and some are turning to gas station branded rewards cards. These might not be the best for saving you money, though.

"They sometimes come with additional fees, can only be used at specific stations, and limit options for those with low credit," says Nicole Peterson, marketing and communications expert at GasBuddy.

The average gas station branded rewards card offers between 5 cents and 10 cents off the gallon, according to a recent survey by Bankrate.com which analyzed 22 cards offered by 17 popular gas retailers.

If you carry a balance, the card is even less beneficial as the average interest rate of the 22 cards analyzed was 25.8%. For comparison, the average credit card APR is 16.34%.

As prices continue to rise, these discounts become less and less helpful, says Ted Rossman, senior industry analyst at Bankrate.com. "Even at that high end of 10 cents per gallon, that's a 5% discount if gas costs $2 per gallon, but only 3.3% if gas costs $3 per gallon, and 2.5% if gas costs $4 per gallon," he says.

Cash-back credit cards can offer big rewards

Non-branded rewards cards often offer bigger savings, Rossman says: "It's much better to get a general-purpose credit card that can be used more widely and offers a strong percentage, such as 5%, of cash back on gas."

A couple of his favorites include:

  • Discover it Cash Back Card: "It's popular for its rotating 5% quarterly cash back categories, and gas is one of the April-June options," Rossman says.
  • Citi Custom Cash: "It gives 5% cash back on your top eligible spending category each month, up to $500 in purchases, and gas is one of the options," he says.

The benefit of joining Costco or Sam's Club

Warehouse clubs, like Costco or Sam's Club, are also a great place to find deals on gas, Rossman says, as they "tend to charge lower prices" for fuel.

They also offer rewards cards.

"I'm a big fan of cards like the Sam's Club Mastercard, which gives 5% cash back on up to $6,000 in annual gas purchases, and the Costco Anywhere Visa, which gives 4% cash back on up to $7,000 in annual gas purchases," he says.

I'm a big fan of cards like the Sam's Club Mastercard.
Ted Rossman
Senior industry analyst at Bankrate.com

You don't have to go to a Costco or Sam's Club to reap the benefits, he adds: "Both give these rewards at almost all gas stations, not just their own locations."

However, if you don't see other benefits to buying a warehouse membership, it might not be worth what it costs to join, which is $60 for Costco and $45 for Sam's Club.

"I'd view gas savings as a side benefit of a warehouse club membership," Rossman says. "In other words, unless you drive a ton, you probably shouldn't sign up for a warehouse club membership solely because of the gas discounts."

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